AEW Europe has completed a €134m (£97m) second close of its European value add fund, taking total commitments to €235m.
The Europe Value Investors Fund, which has a total target of €700m, secured the backing of 10 Austrian and German institutions for its latest close.
AEW began raising capital for the fund last year and the first close was in June 2014. The 10-year closed-end vehicle is due to hold a final close by the end of this year.
AEW Europe aims to achieve an IRR of between 9% and 11% based on investments in core-plus and value-add opportunities. With a predicted maximum 50% gearing, the total firepower of the fund will be in excess of €1bn.
Carsten Czarnetzki, the fund’s manager, said: “The fund’s strategy is to take advantage of the strong demand for stabilised assets in core markets. We will invest in office assets that can be managed or repositioned to core, to support the ongoing reallocation of assets into real estate.”
The fund has already secured four office deals, two in Germany and two in Paris.
The largest deal was for a 172,224 sq ft building in Stuttgart that is short let and is currently 20% vacant.
The other German building – an 86,112 sq ft building in Hamburg – and a small office in Paris’ insurance district are both being prepared for refurbishment.
Czarnetzki said the fund was also closing in on a further two deals in Paris and its first in London.
